Caledonian Trust – a valuation

PUBLISHED: Jan 10 2017 @ 05:35 | Comments (0) |

For eight long years Caledonian Trust (LSE:CNN) has been a holding company for a number of properties in Scotland. Very little was bought, built or sold in that time. But the directors were active in gaining planning permissions, and in enhancing planning permissions.

Now that the Scottish property market is picking up, the directors have decided to go ahead with developments or to be open to offers for the land.

In this Newsletter I’ll try to value the plots, houses and offices owned by the company. Such an estimate is fraught with danger. Indeed, individual asset valuations shown below are bound to be wrong (by a large margin in many cases), so do not take them too seriously, but I hope that in averaging-out we have a reasonably accurate minimum value of the company’s assets.

I think these are conservative assumptions (as I understand commuter belt houses around Edinburgh sell for £200 – £250 per sqft,). For the assets listed in the table I have made a very rough and ready estimate of value based on the following notions:
•Plots, barns with permission to build or convert, or offices already built, are valued at £80 per square foot. For Edinburgh office space unbuilt but with planning permission £40 per sqft. That is my guess of what they could be sold for (on average) as plots or unconverted farm buildings (more value might be available if CNN undertook the build and then sold as completed houses).
•Planning permission applied for but not yet achieved is valued at £10 sqft of house space.
•Land is valued at £10,000 per acre. Bear in mind that I have not allowed for any success in persuading councils to include acres of farmland in local plans, e.g. the 200 acres at Gartshore where “proposals have been prepared for a village of several hundred cottages and houses together with local amenities, all within the existing landscape setting”. If these proposals are accepted then the value of the company becomes a multiple of its current MCap. – a real bonanza.

Those sites with planning consent		Estimated value in June 2016: £80 sqft for consented, £10 sqft if without consent
St Margaret’s House	Currently 92,000 sqft offices + 168 parking spaces. Market rental £0.5m pa. PP for flats for sale, and/or private rented flats and/or students and/or offices (231,000 sqft). Also “Part of the site is ideal for an hotel”. 2016 Report: “the Company intends either to develop or undertake a joint venture development of St Margaret’s or, if suitable offers are made, to realise its value”	£7.4m

Brunstane Home Farm	1 cottage built (£0.3m) + pair of semis built (2,850sqft, £0.8m) + PP for 10 houses, of which 5 nearly completed and 5 scheduled to start build soon (14,648sqft) + Georgian steading + rundown cottage + detached stone building with consent for conversion and extension (3,226 sqft) + Proposals for a two-acre site, “have been accepted in principle” for 18 new-build houses (21,923 sqft) + “lodged a planning application for an extensive residential development”.	2016 Report: “I expect the sales value of this Horsemill refurbishment and the new Stackyard [the 10 houses, I think] to be around GBP4.5m.” £0.3m + £0.8m + £4.5m minus £1.3m build costs of 5 houses + £0.5m + £0.1m + £0.3m + £0.2m + ? = £5.4m

Wallyford	PP for 6 detached + 4 semis (12,496sqft) 2016 Report: “Given these greatly improved circumstances I expect to continue the development of our ten houses next year.”	£1m
Belford Rd	22,500sqft of offices + 21,000sqft for 20 flats 2016 Report: “we will seek to commence the development with a value in excess of GBP10m next year.”	£3.5m
Dunglass	PP for 48 house plots. 2016 report: “We intend to build a few houses there in order establish demand, … I expect the results will allow us to develop the whole site, but at a modest build rate.” Possibility of another 30 houses: “the ground conditions, which initially appeared to preclude development, may be remediated”.	£3.8m

………..To read the rest of this article, and more like it, subscribe to my premium newsletter Deep Value Shares – click here http://newsletters.advfn.com/deepvalueshares/subscribe-1

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.